A credit card processing company, has two fee options available. For each transa

Question

A credit card processing company, has two fee options available. For each transaction, the first fee option charges the merchant 4% of the total purchase plus $1.20. For each transaction, the second fee option charges the merchant 5% of the total purchase plus $0.40 Let P represents the total purchase. Let F represents the fee that the processing company charges the merchant for each transaction. Write a linear equation for each of the two fee options. Fee with plan 1: Fee with plan 2: What total purchase produces the same fee, regardless of which option is used, and what is that fee? total purchase: fee:

Explanation / Answer

So, for 10b) if total purchases remain same :

0.04x + 1.20 = 0.05x + 0.40

0.01x = 1.20 -0.40

0.01x = 0.80

x = $ 80   is the purchases

Total fee P(x) = 0.04x + 1.20 = 0.04*80 + 1.20 = $ 4.4

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